Curt Doolittle

Form: Mini Essay

  • The Wheel? It’s Part Of A System Of Innovation. Or It’s Pointless.

    Peter Gordon notes in passing that the pre-columbians had wheeled toys, despite leaving no record of using the wheel for carts. He directs us to evidence, where the authors posit the reasons for not having adopted wheels. They give a number of reasons with the seventh being the closest:

    With a abundant human workforce throughout Ancient America, and without large beasts of burden, wheeled vehicles would have been redundant and unnecessary. In practical terms, it is easier to carry goods, than to pull the good and the wagon, if the terrain is not well suited to wheeled vehicles.

    Actually, the wheel, the chariot, the horse, wheat, and bronze were the set of tools that made the wheel possible in eurasia. They are the symbols of the spread of western civilization. And none are valuable without the rest. (Yes, even bronze.) If you don’t have a horse, or at least a bull, a cart is a waste of energy. Carts are heavy. They are far too heavy for humans to benefit from hauling. Simple math. It’s not that carts were unnecessary. It’s that they were a bad idea. Especially in jungles and hills instead of plains and on roads. Anthropologists should study a little economics.

  • The Humble Libertarian And Flat Taxes.

    The humble libertarian makes an argument for flat taxes in order to quell the state’s tendency to foster class warfare.

    with a flat tax, they can’t just pick on the winners anymore. In order to get more revenue, their best tactic would be to incentivize overall growth. Lower trade barriers. Lower the costs of doing business. Encourage real growth.

    Exactly. Flat taxes are superior in a democratic government for two reasons 1) they must be kept small, and the lower half of society will make sure that they are kept small. 2) the government must foster growth in order to increase revenues. Secondly, our rhetoric treats people as if they are in permanent classes, yet we tax income which is highly variable. If we are to tax anything progressively, it should not be income, but balance sheets. Lastly, there is a point at which one’s possession of and use of capital is a distortion of the market (The Silver Debacle, or George Soros’s Abuses). This appears, at least in round numbers, to occur at its lowest, somewhere near 1000 times the median income, and accelerates from there. Above that position, people are no longer participating in the market. They are governing it. (This debate is a bit complicated for a comment on a blog post.) So, if our taxes are to include those that are progressive, they should be against balance sheets, with the purpose of getting as many people into the capitalist class late in life as possible. At least, unless you want private capitalist government rather than a market run by market participants for the benefit of market participants. Large capital concentrations in combination with individual knowledge cannot be applied to ‘the market’ as we understand it, and justify it in the classical liberal sense, as a ‘social good’.

  • Do Not Assume Freedom Is A Desire Of The Majority. Security Is. But But Freedom.

    People do not seek freedom. They seek the security that is provided by the prosperity of the creative class in a free society. But they do not seek freedom. They seek security.

    [callout]the classical liberal fantasy that rhetorical debate can convince a majority to favor freedom over security is simply a conservative utopian fantasy. It will never occur. Ever. Period.[/callout]

    And the classical liberal fantasy that rhetorical debate can convince a majority to favor freedom over security is simply a conservative utopian fantasy. It will never occur. Ever. Period. Once an argument is understood — in that it possesses explanatory power, is non-contradictory, and solves a pertinent practical political problem — one can seek consensus. And as long as that consensus appeals to a majority, then a democratic polity can adopt the policies that support the argument. However, the classical liberal ideal of freedom cannot be supported within a democracy, and no such rational arguments can prevail, for the sole reason that freedom is the desire of the minority – the creative class. And instead, safety is the objective of the majority. And the majority will always pursue safety rather than liberty. If the freedom-desiring minority loses it’s willingness to use violence to preserve it’s freedom, it will possess neither freedom, nor prosperity. And the rest of the civilization will calcify upon being deprived of the mental fertility of its creative, and therefore, most productive classes. This is the history of civilization. Fertility followed by calcification, followed by conquest and poverty. The answer is not violence, nor is the answer argument. The answer is sufficient argument so that the creative classes will apply violence, for the purpose of obtaining and maintaining the political power needed to secure the minority liberty against the predatory majority’s exploitation of the creative class in order to obtain security.

    [callout]We can be free, or we can be exploited, or we can be oppressed or we can be enslaved, or we can be murdered. Choose your position on that spectrum.[/callout]

    We can be free, or we can be exploited, or we can be oppressed or we can be enslaved, or we can be murdered. Choose your position on that spectrum. Because your actions in the use of violence will determine it. Talk is cheap, and demonstrably ineffective.

  • There is No End Of Data, Because There Is No End Of History

    Regarding Tech and Storage, and the idea of ‘finite content’ as an allegory to the ‘end of history’: Humans are notoriously victims of boiling-the-frog biases: they cannot sense long term changes and discount prior (and forgotten) opinions for current ones. Inter-temporal cognitive biases are legion. We are going to store increasing amounts of data – nearly endless in quantity. And as that data accumulates we will transform business, social life, and the economy. Think of it along these lines: We have decreased the transportation cost of content. But in doing so we have reduced the barrier to distributing content. The problem will be whether we become better at the use of the available content, or whether we can synthesize something from all that content, good and bad, and produce another generation of new content. Frankly, as the number of channels with weak or repetitious content demonstrates, we are short of content, and innovative content is becoming very expensive to produce. Or are we stuck with the same limited number of permutations of our basic narratives, and stuck with the same very large number of human cognitive errors and myths, and destined to live under the eternal problem of pedagogy: the vast number of permutations of the same content needed in order to convey the same 1500 ideas (that’s all there are) to billions of people in hundreds of cultures, all at different ages, at different states of development, each solving different problems in the context of their own individual experiences? Can we produce the conceptual equivalents of the mono-myth is each of our fields of study? Can we simplify pedagogical symbols as if they were fundamental truths, when such truths would be contra-beneficial to some cultures, races, classes, and much more beneficial to others? As someone who does a painful amount of research, it is vastly easier today to learn anything at all than it was even five years ago. And compared to library-trading obscure works in college, vastly faster. What will come of this availability of information, or rather the frictionless availability of information? Our accounting standards are a catastrophic block on data collection, because as they exist, they launder causality – accounting as we practice it is the dusty remnant of a bygone age of sea voyages. if we changed to tagged accounting data we would produce volumes of data for mining that cannot be easily found today. What would this mean for data and analysis? Taxation? Policy? Product development? THe structure of the corporation and credit cycles? There are a number of startups producing hardware that you wear around your neck, and that take photographs every second, and record all sound all day long, creating a visually indexed record of your day. How would a storage system of that nature change the world? Privacy is changing because we are socializing a new kind of manners wherein everyone is expected to be flawed, or imperfect. How will that change the world? From a product and service manufacturer’s standpoint, the typical economic analysis using factors of production is antiquated. The primary problem for most companies is to produce a product that is interesting enough to purchase. All other things being equal, today people are purchasing almost entirely aesthetic objects for purely status-seeking and therefore opportunity-seeking purposes. The price of materials is not an issue any more than is the price of food. How is this design-economy accounted for in our models and how does this affect the craft of economics, when the design function is not as visibly a factor of resource costs? Companies do not measure their brand potential (the sentiment of consumers toward a company and its products and how that sentiment is convertible into revenue) as a form of equity. If investors could see this information, how would that affect management of companies? If it becomes increasingly easy to measure it, how will that affect markets? In the post war period, social democratic society was unified under a proletariat-and-middle-class system of inclusion-and-status-seeking-through-consumption. Now that the consumer society is ‘saturated’, and status due to ownership is insufficient to provide access to opportunities, (because everything is so cheap) how will people express their identities as purchases? Each nation state has a different IQ distribution. (If you don’t like the reality of it, I’m sorry.) Since there are material thresholds to the learning of, and use of, abstractions, there appear to be limits at 130’s for designing and using ideas, 122 for designing machines, 110 for a classical education. 105 for repairing machines. How will this affect the markets, demand for technology, or the lack of demand for it? There is no end of history. The problem of human coordination and cooperation is an endless process of temporal calculation for intert-emporal ambitions. The great revolution in farming took thousands of years to span the globe. The revolution in scientific thinking started by the anglos has only been in process for eight hundred years. The great revolution in production (and calculation) of the Anglos has taken only five hundred so far. But it has been a bloody process of resistance to change. There is no end of content. Because there is no end of history.

    [callout]Because, in the end, the primary purpose of our data collection is political in nature.[/callout]

    There are a limited number of fundamental truths available to man. But fundamental truths are not as useful as we think they are. THe coordination of human beings toward shared goals requires that they believe in myths. And truth will only hinder their achievements. Combined with the human drive for status, and the different abilities of men – some less, some more – the permutations of myths (or deceptions) will create similar themes as we have seen in the past, forever. And the media and data used to distribute those infinite permutations will do nothing except increase in scale. ***Because, in the end, the primary purpose of our data collection is political in nature.*** It always has been.

  • The Keynesian Conversion Of The Responsibility Of The State

    Think of how much easier the job of government is, when instead of seeking competitive increases in production, it seeks redistribution and reduced unemployment. The first requires that you have some comprehension of your economy. The second requires that you have little to none.

    [callout title=The Net Effect Of Keynes]The net effect of the Keynesian revolution was to change the purpose of the government from one of concentrating capital such that the population would derive benefits from increases in competitiveness and production, to one of consumerism, whereby the citizenry is discouraged from saving in order to create consumer velocity.[/callout]

    The net effect of the Keynesian revolution was to change the purpose of the government from one of concentrating capital such that the population would derive benefits from increases in competitiveness and production, to one of consumerism, whereby the citizenry is discouraged from saving in order to create consumer velocity. We have accomplished that objective. We have converted to the consumer society and shipped the productivity of our lower classes offshore, and made the upper classes dependent upon the lower classes consumption. We have destroyed the cultural habit of saving. And with it, the culture of individual responsibility. Our whole country lives under the myth of prosperity without applying a discount to the increased risk we are exposed to by our hubris. The responsibility of the state is capitalization which reduces risk. Not consumption which increases it.

    [callout title=Callout Title]Think of how much easier the job of government is, when instead of seeking competitive increases in production, it seeks redistribution and reduced unemployment. The first requires that you have some comprehension of your economy. The second requires that you have little to none.[/callout]

    I am not against redistribution or the insurance-state. I am against the destructive state. And our state has become destructive. It has become destructive because it has become consumptive. And it justifies that consumption by leaving competitive increases to the private sector, despite the market’s incapacity for extraordinary investments. We need 200 nuclear power plants. We need a new power grid. We need to convert to electric cars. We need to rebuild the voting system and reform the houses of government. We need to increase research funding for hard sciences and decrease it for humanities and social so called sciences. We need to change the structure of the tax code. We need to change accounting procedures that allow causal laundering of money. We need to restructure corporate law so that we can de-corporialize the corporation so that it must serve customers or fail. We need to reform the banking industry. We need to privatize the administration of social insurance. We need to do a hundred other things that will create institutional improvements for the population to compete against other nations who have cheaper labor costs. Yet we consistently fall under the Keynesian spell, and distract ourselves from the meaningful work of building a competitive society.

  • Conservative Complaints About The Social Security Scheme

    The conservative complaints with social security are that it is not a fund, but a state-expanding tax. Nothing was paid into it, and therefore it is simply a current tax to redistribute from young producers to old consumers who failed to save. And secondly, that this tax also funds an intrusive and abusive government. These are structural complaints, not complaints about ambitions or outcomes. The original creators’ ambition for this tax was to create an insurance scheme for the minority of people who lived past 65. Except, people vastly live beyond 65 today. In other words, the tax went from low to high risk because of unforeseen consequences. The conservative objection to liberal hubris is that they are asked to absorb risk because of the STRUCTURE of this system, which is now a form of intergenerational welfare, rather than the form of insurance that it was designed to be. The solution to this structural problem is as follows: 1) to convert from an inter-temporal redistributive and high risk tax to a low risk insured savings program. 2) To change from income tax to balance sheet tax. 3) To have the government participate in, and redistribute, profits from the use of credit money – credit money which is borrowed from and secured by the promise of labor by the average person. This set of changes would eliminate benefits at a specified multiple of the mean. It would unfund government bureaucracy. It would insert more money into the economy as investment capital, and decrease the negative effect of inflating the monetary supply on savers.

    [callout title=It’s A Tax]social security … not a fund, but a state-expanding tax. Nothing was paid into it, and therefore it is simply a current tax to redistribute from young producers to old consumers. [/callout]

    The general argument against the correction of the social security system, is that if we increase the tax by 2% and change the age slightly, that the system as it stands would be fully funded. To which I’d counter, only if that 2% comes from balance sheet weight, not income. Because for a vast number of companies that are not subsidized by the financial markets, 2% would be half of their annual profits, and this failure would have to be built into the system. I see no reason to rely upon assumption that the 20th century, which consists largely of the greatest external advantage that a nation has ever experienced, can be used to project the future. It is not logical to ask decreasingly populous generations facing increasing worldwide competition to support a longer living and increasingly expensive class of retirees, when instead, retirees should have saved to lend money to the generations that follow. These advantage are not sustainable, and even if they are, the system currently asks all to risk in order to fund current government, rather than all to save, to insure their mutual success. The belief that we will continue our economic advantage is the myth of american exceptionalism. Savings is sustainable – in any culture. But not the assurance of worldwide competitive advantage which can be redistributed. As an entrepreneur, I do not fear the market. I fear that the government will extort enough from the entrepreneurial class that they will abandon their belief that they can outpace the predatory state. Tax individuals not by income but by balance sheet. Progressively tax companies for market participation. Eliminate the double tax system on dividends. Increase the tax on speculative returns.

    [callout title=Fears]I fear that western advantage, which was demographic, technical and military, will be neither demographic, technical, or military. And that the very institutions that were limited enough to guarantee us our freedom will be the institutions by which we are permanently enslaved and impoverished.[/callout]

    I fear that the bureaucracy, as in the UK, will become a predatory class living on a virtually enslaved population. I fear that western advantage, which was demographic, technical and military, will be neither demographic, technical, or military. And that the very institutions that were limited enough to guarantee us our freedom will be the institutions by which we are permanently enslaved and impoverished. It is easy to rate the success of any government by the direct redistribution divided by the cost of government employees, and seek to constantly improve the ratio, just as we do for non-profits.

  • Conservatives Cannot Articulate Their Promise, And A Warning Is Not Enough

    The conservative movement lacks skill in articulating it’s position. It does so because it has shifted from the intellectual debate of the 50’s and 60’s to the emotional debate of the post 60’s era. It has, unlike the libertarian movement, failed to provide a vehicle for educating conservatives with POSITIVE statements rather than negative castigations. Conservatives have largely failed to develop a language and ‘scripture’ because they do not have a solution other than to return to the nineteenth century classical liberal model. That model will never rise again. It only occurred because government was very weak, and the individual entrepreneurial need to expand and populate the continent required both private ambition and private capital. It required the conversion of resources into taxable resources, which would empower the government. Conversion requires business people the way conquest requires soldiers. And therefore commercial society was in control during that period. Our current problem is not to convert land into taxable assets. It’s to maintain the international system, and our ability to financially manage the international system. We have been paying for it by trade advantage for some period of time, and then selling dollars for the past forty years. Liberals do not want us to maintain that system but they want the rewards that come from it to be redistributed. Conservatives object to this position. Neither really understands that there is no american exceptionalism except american military exceptionalism. Our future problem is that in redistributing the wealth of that military network of trade and banking we have directed too much of the profit to bankers and not enough to the citizenry. Conservatives do not like this privatization of wealth any more than liberals do. But most importantly conservatives do not like being castigated and treated as Being conservative simply means taking a gradual approach to social change and particularly with respect to the financial, family and military traditions. It means being skeptical that our visions of the future will come true, and looking at the world as what people ACTUALLY DO not what we WISH they would do. We as a nation are notorious for predicting an optimistic future that cannot or has not occurred. The dialog around our prosperity is often inaccurate and self-congratualtory rather than factual. We have transformed our culture of evangelical christianity into one of evangelical democratic secular humanism. Conservatives are skeptics. They may speak in antiquated language, because that is their language. They may fail to articulate their position effectively because of that language, but they ACT conservatively, think conservatively, and treat the world conservatively. This is why conservatives are, in general, more prosperous – and frankly, happy. And the sacrifices that they make in order to be prosperous are material to them. They remember them. And therefore they resent those sacrifices being ‘spent’ by others who do not make the same sacrifices. Monetarists and capitalists are not conservatives. They may hide under conservatism. But they are not conservatives. The conservative class is a military, middle and craftsman class and it always has been and always will be. It is the ‘residue’ of the european fraternal order of soldiers at the bottom, and at the top, it’s a ‘residue’ of the middle class movement that revised and adopted civic republicanism during the enlightenment as a way of transferring power from the kings and church to the middle class. it is an alliance of the military and middle class. Liberalism (socialism, communism) is a ‘residue’ of a union of the priestly cast and the peasantry. Academia is simply an outgrowth of the church. The peasantry has always allied with the church, and the church has always had power because of it’s support by the peasantry. And that said, we do not have a separation of church and state. Our state religion is now democratic secular humanism. We are now a state-run-religion using the myth of division of church and state to oppress (or reform) religions so that we can have a state sponsored church. That’s it. That’s the articulated conservative position. The republican party collects conservative coalitions. The republican party is not a conservative party. conservatives join the republicans because they have no choice. They see the party as corrupt. People are complex and only join parties because of limited choice mandated by our ‘winner takes all’ form of government, which fosters class warfare. In fact, all political decisions exist on a spectrum or bell curve. There are a myriad of political decisions to be made. There are a myriad of people with different abilities to understand each political opinion. Each person is interested in a myriad of decisions. Parties are collections of people with opinions. Very skilled people tend to be highly unsatisfied with party choices. Very unskilled people tend to simply support their party of nearest interest. Parties therefore pick platforms that make enough people happy that they can get into power. arguing that conservatives want to keep things asa they are, is a silly argument. The objection is simply illogical. The question instead, is whether liberals propose a solution that conservatives can live with, and wether conservatives can propose a solution that liberals can live with. If we had listened to the liberals in the last century we would have ended up like either Russia or China. If we had listened to conservatives we would not have had our progressive social changes. It’s the competition of ideas that gives us the choice as a body politic.

  • Density Is Not The Panacea Utopians Think It Is

    What is it about an office that promotes so much illness? I know that offices where people interact frequently and move between locations lot, and have greater density are natural distribution centers for affection, and I know that the more time children spend in day care and in school, the more they become distributors, and I know that closed-ventilation buildings are better grounds for bacteria and viruses, but knowing that is not the same as having to lose so much time to illness. I mean, it just seems like between my son, the office and airports my immune system is exhausted. It reminds me of a conversation I had with a chinese national a few weeks ago. There is this wealthy Chinese urban activist whose name I don’t know, but he wants to design and build very dense housing for people. What I told him was that it has been thought about and tried over the past century. But the problem is that HUMAN BEINGS ARE TOXIC creatures, and second, that if you move shanty-dwelling-people to nicer circumstances, they just maintain their previous behavior and destroy it – inviting lots of relatives, and putting up sheet metal and cardboard. Now the counter argument is that chinese authorities can impose discipline that other nations can’t get away with. But Im skeptical. What bothers me as a political economist is that all civilizations to convert to urbanism die. (Jarred Diamond has it wrong. It’s an information problem not a resource problem. He has it backwards.) We don’t know how to run a largely urban society for very long because law, which is our primary social technology after religion, simply ceases to work in large cities without extraordinary costs of repression. Money and credit may change that but only if we change policy from taxation to credit the way we changed from religion to taxation as a means of maintaining social order. Human density is not the panacea our planners and utopians think it is. Density is toxicity, it decreases the disease gradient, and it leads to political tyranny and instability, and it becomes increasingly difficult to concentrate capital and therefore productivity. The problem is to balance birth rates and productivity. Not density. And no matter what we do, ‘He Who Breeds Wins.’

  • Germany Should Exit The Euro And Return To the Mark

    THe NYT Opinion page includes recommends Germany leave the Euro? (Referring to a posting elsewhere.) Yes, it makes sense. Earlier last month I wrote a series of letters and posts recommending Germany pull out of the Euro myself. Mediterranean Europe and Germanic europe are too different in culture, social structure and values. Restore the DM. Leave the Euro to the southern countries who need it, and have similar social values, and are willing to fund those social values. Currencies as they are currently used, are the primary means of social insurance and redistribution. People are naturally gregarious to their own ethnic groups, and are naturally not gregarious with what they see as competing groups, and in particular, groups that they see as a permanent drain on their resources. Because currencies are a means of social insurance they are inseparable from the social orders that employ them. Countries need their own currencies. The spanish, italians and greeks can then maintain their historical poverty born of their less productive lifestyles, without impoverishing the north. Besides, the north has a new permanent semi-revolutionary underclass it is supporting at home to deal with. THe USA has a similar problem. It is a domestic empire over somewhere between four and six separate cultures, with entirely different economic interests, and cultural interests, and political friction between them is becoming intolerable. The only reason that america government has functioned since the 1900’s, is because of the two party system, and the south’s rejection of the republican party. With the south now more pragmatic, this prior balance has been shattered, and the country is increasingly a north and west against a south and interior. For exactly the same reasons as europeans face these problems. It is all well and good to believe in the myths of egalitarian secular humanism, while you’re living in a temporary era of post-war, then post-soviet prosperity. But western civilization no longer has it’s economic advantage over the rest of the world. The west will be permanently poorer, even if retaining it’s ordinal status, for some period of time, simply due to the northern european people’s ancient tendency to eschew corruption. Since a currency is a reflection of social values, nations need their own currencies. The euro was a failure. Return to the DM.

  • An Understanding Of Greenspan

    A more analytical understanding of Greenspan: First, If you read enough of Greenspan, he tried to master the processes by which businesses actually made decisions, to a degree that few economists ever attempt. He was intimately aware of the daily needs and habits of business. He was intimately informed in a way few others seem to have been. Second, he actually believed the new devices for distributing risk (along with the formulae of the quants) would work as prescribed. Third. like most people of the Regan/Thatcher era, he was trying to counteract socialist influences in society. They had very clear memories of the pre-johnson era and also had the unfortunate experience of living through the 1970’s, which was about as depressing and hopeless as the times we face today. It was from this contrast that they took their motivation. We forget that in retrospect, these people were trying to use monetary policy to reconstruct prior libertarian values. They hoped to rebuilt a society of individual responsibility (and ownership) using a tool which accomplishes the opposite, even if they felt using that tool was acceptable if it was only used for the short term. It is in these three errors that Greenspan built his house of cards: first, business can use credit to privatize wins and socialize losses, and did so. Deep knowledge of business is good, but deeper knowledge of human nature is even better. Personally I am not sure this device to retrain people out of socialistic beliefs would not have worked had the state provided direct liquidity into competitive innovation in the Indian model rather than general liquidity, and regulated banking such that all originated loans must remain with their originators. In effect libertarian values need to come from somewhere. They are not terribly natural to man. And liberty has always, throughout history, been the objective of a minority. (PLease don’t beat on me for advocating state intention, i”m not attempting to do so, only explain what would have been possible in context.) Second, the new devices and formulae were erroneous, and for commonly stood austrian reasons: the quantitative content of these devices is inseparable from the individual knowledge of the loan’s originator. Very little debt is predictable under duress, and it cannot be aggregated, because fundamentally all credit consists of unique categories, because these categories are determined by knowledge only available to the originator. Third, the influence of these people on the momentum of the bureaucracy, was insufficient. And that is the real Misesian/Rothbardian problem. To enact such a thing at scale would require political force actively despised by the field’s advocates. Describing an ideal state of affairs is an impressive and important research program. It has yielded most of the answer we are looking for in solving the problem of economic, political and social theory. People in our libertarian camp, have not supplied yet a sufficiently POSITIVE argument for political economy. Hoppe is closest. Hayek tried desperately. But Mises, Hayek, Parsons, and Popper all failed to provide a sufficiently positive argument. It certainly appears that Keynes did find a sufficiently positive argument even if it was an erroneous one. (Although the debate is open on whether he would have approved of how his ideas were used.) But more importantly, libertarians are a minority. We have always been a minority. And we are likely to continue to be one. We have a philosophy of the entrepreneurial class. And as a class philosophy it is an insufficient philosophy as currently constructed. That is, unless we understand that in this division of labor we need at least three philosophical frameworks: one for each class. As such, while Greenspan failed, I don’t blame him for failing, any more than I blame Rothbard, Mises, Hayek, Popper or Parsons for failing. It is becoming clear that the dominant political structure of the future consists not of democratic capitalism, nor social democracy, but of totalitarian capitalism, because only totalitarian capitalism can concentrate capital in sufficient quantity and rapidly in time to maintain the status of elites in one nation against those of others. And if we think that there will not be political elites who profit from their position, then we do not understand the history of mankind.